Oil prices fall after prediction of lower demand growth

Demand for oil worldwide is still growing, but not as fast as previously predicted, the International Energy Agency says in a new report Tuesday.

Oil prices slid Tuesday after a report predicted lower demand than expected -- even though a new glut is not in sight.

The International Energy Agency forecast that demand for oil is still growing, but just not at the rate that it previously predicted. Lower oil demand raises questions about the strength of the global economy, but in this case it does not appear to signal a new oil glut.

Still, the report was enough to rattle oil markets. The benchmark U.S. crude, West Texas Intermediate, fell to $44.90 a barrel, down $1.39 or 3%. Brent crude was down to $47.04, down $1.28 or 2.65%.

The IEA says world's oil supplies shrank slightly in August despite more vigorous pumping by Mideast producers.

The IEA's Oil Market Report was revised to predict that the world will be demanding another 1.3 million barrels a day this year, down 100,000 barrels a day from its previous forecast "due to a more pronounced" slowdown in the third quarter.

The slowdown is expected to continue into 2017, when demand will shrink again to 1.2 million barrels a day.

World oil supplies were down 300,000 barrels a day in August due to less production in countries that aren't members of the Organization of Petroleum Exporting Countries. Higher output in OPEC countries nearly completely offset the decline, the IEA says. Production was strong, in particular, in Kuwait and the United Arab Emirates, and Iraq continues to inch up its supplies.


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